Month: September 2006

At the recent ALI-ABA Conference entitled “Retirement, Deferred Compensation, and Welfare Plans of Tax-Exempt and Governmental Employers,” Dan Hogans, Office of Benefits Tax Counsel, U.S. Department of the Treasury, gave a presentation on Internal Revenue Code section 409A and remarked that the IRS is “moving forward” with preparation of final regulations to be issued “this fall.” He remarked that due to the delay in the issuance of final regulations, the targeted effective date of January 1, 2007 as stated in the proposed regulations will likely be delayed as well. He noted that the final regulations will reflect many changes due to useful comments received by IRS regarding the proposed regulations. He went on to say that practitioners will need time to digest the content of the regulations and that is why the effective date will likely be moved to a later date.

It is fairly uncommon to see Circuit Court of Appeals cases where mergers and acquisition issues and benefits issues intersect. That is what happened in this recent Fifth Circuit case of Halliburton Company Benefits Committee v. Graves et al. which is a must-read for benefits lawyers who are involved in transactional work. The case holds that a merger agreement can act as a plan amendment of a benefit plan, even though it is not labeled as a plan amendment. The case also holds that the “no-third-party-beneficiary” clause which is standard in these types of agreements will not protect the surviving company from claims of participants since those claims are protected under ERISA.